Hotel daily room rates or rack rates are typically predetermined in advance as much as six months to a year or more by using many different types of forecasting formulas. Once determined, the daily rates for rooms and any discounts are entered into the hotel's reservation system and made available over a Global Distribution system (GDS). A hotel, however, can sell a room for any price and considers doing so when, for example, rooms for the current day are unsold (typically referred to as “distressed inventory”). If a room goes unsold for a given night, there is no way to recover the lost revenue. Deciding when to make a rate adjustment on distressed inventory is typically based on the hotel's current room availability and other current market conditions which were not known at the time the daily rates were predetermined.
Many hotels have employees telephone competing hotels in the surrounding area to exchange current rates and number of rooms available. This process is typically called a “call-around”. Hotel managers use the information from the call-around to price any of its remaining rooms based on the area's current market conditions. That is, the hotel manager checks the call-around report to see if the hotel should make real-time rate adjustments for any remaining inventory that day. When there are many comparable rooms available in the area, daily rates are typically lowered. Likewise, when there are little or no comparable rooms available in the area, daily rates are typically raised.
The call around report can also be used by front desk personnel to solve overbooking or sold-out problems. Overbooking is a common hotel practice where rooms are overbooked by a certain percentage based on historical trends for no-shows. A hotel is overbooked when it has no available rooms but still has guests arriving with guaranteed reservations. In an overbooked situation, the front desk personnel can use the call-around report to call other hotels to find an available comparable room and make a reservation for the overbooked guest. When the guest arrives to check in the hotel, they are told the hotel is overbooked but a reserved room awaits at the other hotel. In sold out situations, the front desk personnel can use the call-around report to refer walk-in customers or late customers with non-guaranteed rooms which were automatically cancelled at a predetermined deadline to other hotels having rooms still available. The potential customers usually appreciate the referral, as opposed to being told to “hit the street”, and as a result are much more likely to return to the hotel in the future.
While the above-described call around service can at times provide desirable results, it can be a very time consuming process. Often the hotel personnel are too busy to finish, or even start, calling all the competing hotels. Without the call-around report, rooms can be over or under priced for the current market conditions. As a result, the front desk personnel can have no available rooms, no referral information, and many tired and angry potential customers. Even when a call-around report is available, the front desk can be left with no referral information if the limited number of hotels on the call around report are also sold out. In this situation, the front desk personnel are left with the options of either the time consuming process of calling all around town or further for referrals or simply turning away angry potential customers. Accordingly, there is a need in the art for an improved way of obtaining hotel rate and occupancy information.